All-day breakfast: A wake up call?
To mirror our friends in the States, McDonald’s Canada is now slowly rolling out its all-day breakfast by testing it at several locations across the country. The blurring of divisions of time between meals is becoming more obvious as Millennials are starting to get a hold in the marketplace.
The standard three-meals-a-day approach is slowly becoming more of an ideal than a reality. This is likely what McDonald’s decision means to all of us.
This phenomenon was highly predictable. Over the last ten years, most institutions, such as universities and colleges, have gotten away from setting specific hours for meals, just to accommodate schedules and fast-paced lifestyles. While boomers want to indulge, Millennials want choice.
Most boomers still prefer to eat breakfast at home; Millennials, on the other hand, eat on the go. According to new research findings from Mintel, 65% of boomers eat breakfast at home most days, while 60% of Millenials eat breakfast somewhere else. And if breakfast is prepared at home, more than 80% of meals will take less than 5 minutes of preparation. Most of it is ready-to-eat bars or juices.
The ever-complicated modern morning rush is disrupting market rules and forcing the food service industry to reorganize its approach to serving breakfast.
It is hard to blame McDonald’s for trying to capitalize on this monumental demographic shift. When McDonald’s in the U.S. committed to the all-day breakfast strategy, the company’s share was at about $96. Now it is up by almost 25%, and same-store sales are up 6% from last year.
It was a highly successful change. The company added new menu items with healthier ingredients like the “super food” kale, something Millennials look for. Top line growth and sound financial results all across the U.S. have kept franchise owners happy.
In Canada, McDonald’s has deployed an aggressive strategy to cater to Millennials. Hormone-free chicken in a few years, cage-free eggs by 2025 — their procurement is going through a complete transformation. As a breakfast space, McDonald’s Canada has made a name for itself. With offers of free coffee and with McCafe’s, the concept of the stores is deceiving, giving Starbucks, Tim Horton’s and other coffee shops a run for their money. Any Canadian business that generates a significant amount of its revenue between 6 am and 9 am is getting anxious.
With all day breakfast, habits can easily change. Offering free coffee for a month helped McDonald’s establish itself as a breakfast contender. Since 60% of all breakfasts eaten outside the home include a coffee, McDonald’s Canada knew the free coffee offer was the hook it needed to move the profitable McMuffin.
It also likely knew that all the top breakfast restaurant chains in Canada — Tim Horton’s, McDonald’s and Starbucks — have achieved higher sales when their coffee gained market currency, one way or another. With tea and now cold brew, things are going to get interesting again.
Some may suggest that this decision by McDonald’s Canada is opportunistic and strategic. But given global demographic trends, the company may be literally late to the table — no pun. All day breakfasts are already a well-established offering in the fast casual, full-service and brunch domains.
You have the specialty food service providers like Cora’s, Eggsmart, Ben & Florentine, and Tutti Frutti who are also doing very well. But you need time to eat a meal at one of these establishments.
A brunch with friends on the weekends is enjoyable, but impossible to manage through the week, with daily commutes and other obligations. In fact, we have seen some consolidation in this sector of late, which may indicate that growing business in this field is facing headwinds.
Many food service companies have realized for about a year now that the divide between breakfast, lunch and dinner is eroding. The pursuit of convenience seems to be trumping the traditional view of how individuals pace themselves throughout an average day. We eat when it fits our schedule, and it rarely does.
Eating at the desk, or even eating while walking is almost a new normal. More than 60% surveyed in the Mintel study who work full-time claimed that they seek portable food solutions almost daily. There are even suggestions that the three-course meal is slowly disappearing into the sunset, being replaced by one complete course which includes all the proteins and fibers one needs — more evidence to indicate that time itself is perhaps food’s most powerful foe.
The all-day breakfast is what we deserve. As consumers, we are not willing to invest time in our breakfast. The data is telling: multinationals are investing in our breakfast for us.